How often can you refinance a home loan? (2024)

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If you’re looking to get a new mortgage or borrow against your home equity, you might be wondering how many times you can refinance.

While a lender may not limit how many times you can refinance your mortgage. But some lenders might have a waiting period between when you close on a loan and refinance to a new one. In this article, you’ll learn about some of the pros and cons of refinancing multiple times — along with how it can affect your credit, when refinancing would make sense and what costs you should consider first.

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  • How often can you refinance your mortgage?
  • Does refinancing hurt your credit?
  • When refinancing makes sense
  • Costs to consider: Is it OK to refinance multiple times?

How often can you refinance your mortgage?

Refinancing involves paying off your original mortgage and creating a new one. Legally speaking, there’s no limit to how many times you can refinance your mortgage, so you can refinance as often as it makes financial sense for you. Depending on your lender and the type of loan, though, you might encounter a waiting period — also called a seasoning requirement.

Here’s how long you might have to wait based on your loan type.

  • Conventional loan — You typically don’t have to wait to refinance, though some lenders may enforce a six-month waiting period.
  • Cash-out refinance — There’s generally a six-month waiting period.
  • Government-backed loan — FHA streamline refinances require you to wait at least six months since your first payment due date and 210 days from your closing date. You must also make at least six mortgage payments. For USDA loans, you have to wait 12 months after your original loan’s closing. VA streamline refinances require a waiting period of 210 days after the first mortgage payment was due.

Does refinancing hurt your credit?

The refinancing process can have a temporary negative impact on your credit for a couple of reasons.

First, potential lenders will likely check your credit reports with a hard inquiry, which could temporarily lower your credit scores by a few points. But there are actions you can take to manage the impact.

If you’re shopping around for a mortgage, you have a window of time where multiple credit inquiries are only counted as one for your credit scores. You typically have 14 days — though it could be longer.

While lenders can rely on scoring models that give you more time to shop without incurring an additional hard inquiry, you may want to get your rate quotes within those 14 days since you typically won’t know which scoring model your lender is using.

Secondly, bureaus generally consider older loans indicative of a proven track record of making payments, which is good for your credit. But refinancing causes your mortgage to become “new” debt, which can hurt your credit. Keep in mind that this impact is only temporary. As you make on-time payments each month, refinancing may actually benefit your credit in the long run.

When refinancing makes sense

If you’re considering refinancing, crunch the numbers and make sure it’s a good move for you financially. You can estimate your potential savings using Credit Karma’s free mortgage refinance calculator.

Here are a few potential benefits to refinancing.

Lowering your interest rate

If interest rates are lower than what you currently have or if your credit has improved in recent years, refinancing may help you lock in a lower interest rate and, as a result, lower your monthly mortgage payments. Refinancing with a lower rate may also help you build equity in your home more quickly.

Changing your loan term

Do you need more time to pay off your mortgage? Or would you prefer to pay it off more quickly? Refinancing may allow you to change the term of your mortgage. A longer loan term can lower your monthly mortgage payment, but it’ll take longer to pay off the loan and at a higher cost. A shorter term, on the other hand, will likely increase your monthly payment, but you’ll typically pay less in interest over the long run.

Keep in mind, though, that you don’t have to refinance to change your loan term. You could shorten it yourself simply by putting extra money toward the principal each month.

Removing private mortgage insurance

If you originally put down less than 20% on your conventional loan, your lender likely required you to pay private mortgage insurance, or PMI. Many lenders require PMI to protect themselves in case you can’t make your mortgage payments. PMI premiums depend on a variety of factors, but you can expect to pay about $30 to $70 a month per $100,000 you borrow, according to Freddie Mac. Refinancing may make sense if it allows you to remove this expense.

Avoiding a payment jump in an adjustable-rate mortgage

With an adjustable-rate mortgage, or ARM, your interest rate can increase or decrease, which affects your monthly payment. If you know your interest rate is about to go up, refinancing may allow you switch to a fixed-rate mortgage, which means your interest rate would remain stable along with your monthly payments. Or you can choose to refinance with a new ARM that has a lower starting rate, smaller rate changes or lower interest caps.

Borrowing against the equity in your home

If you want to tap into your home equity, you might consider a cash-out refinance. This involves paying off your existing mortgage, replacing it with a larger one and taking the difference in cash. But if you don’t want to restart your loan term or if a seasoning requirement is standing in your way, you could look into a home equity loan or a home equity line of credit (HELOC) to see if one of those options would make financial sense for you.

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Costs to consider: Is it OK to refinance multiple times?

There are several expenses to be aware of when refinancing your mortgage. For example, you’ll need to pay closing costs again, which can amount to about 3% to 6% of your remaining loan balance. If you refinance multiple times, those closing costs can quickly add up. Let’s take a closer look at a few common closing fees for refinance loans.

Origination fee

Lenders charge an origination fee to process your application and underwrite your loan. This fee often adds up to about 1% of your total loan amount.

Appraisal fee

Before approving your loan, most lenders will require an appraiser to inspect your house and determine its value. Appraisals usually cost around $300 to $700, but the exact price can vary based on where you live and what type of home you have.

Inspection fee

Most lenders require a licensed home inspector to make sure there are no major problems with your property. They typically check for structural damage, plumbing issues and signs of a pest infestation. You can expect to pay around $175 to $350 for a home inspection.

Title search and insurance

During the loan application process, your lender will have a title search done to uncover any potential legal claims against your home, including liens. You’ll also pay for title insurance, which protects your lender in case it misses anything in the title search. These fees can cost you anywhere between $700 and $900.

Discount points

When you’re refinancing, your lender may let you pay discount points at closing in exchange for a lower interest rate. Each point represents 1% of the total loan amount. For example, one point for a $200,000 loan would cost you $2,000. Generally, borrowers pay anywhere from zero to three points at closing.

Prepayment penalty

Depending on your lender, you might have to pay a fee if you pay off your loan early or refinance. In general, prepayment penalties add up to one to six months’ worth of your mortgage interest. Not all lenders charge a prepayment penalty, though, so be sure to ask your current lender if you’ll end up paying this fee if you refinance.

What’s next?

There are some situations where it might be worth it to refinance again, especially if you’re not planning to sell your home for a while. For example, you may be able to take advantage of lower interest rates, change your loan term or borrow against your home equity. But before making a decision, it’s a good idea to ask yourself key questions, including …

  • How would refinancing again affect my monthly mortgage payments, loan terms and credit?
  • How much would it cost me at closing?
  • Would it be worth it in the long run?

Also, if you’re looking into a cash-out refinance, you may want to avoid using the funds to pay off unsecured or short-term debts, such as credit cards or car loans. Be sure to consult with a financial professional and look into other debt-consolidation methods first.

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About the author: Jenny Rose Spaudo is a freelance writer and content strategist specializing in finance, technology and real estate. Her writing has appeared in Business Insider, Credit Karma, GOBankingRates and more. Visit jennyroses… Read more.

How often can you refinance a home loan? (2024)


How often can you refinance a home loan? ›

Legally speaking, there's no limit to how many times you can refinance your mortgage, so you can refinance as often as it makes financial sense for you. Depending on your lender and the type of loan, though, you might encounter a waiting period — also called a seasoning requirement.

How long do you have to wait to refinance again? ›

Your current lender might ask you to wait six months between loans, but you're free to simply refinance with a different lender instead. However, you must wait six months after your most recent closing (usually 180 days) to refinance if you're taking cash out.

Is there a downside to refinancing multiple times? ›

Cost of refinancing multiple times

Each time you refinance, you'll have to pay fees, such as for the application, appraisal, credit check, attorney and title search. These can vary depending on your area and the lender, though it's common to pay anywhere from 2 percent to 5 percent of the loan principal.

Can you refinance a 15 year mortgage to a 30 year? ›

If you originally got a 15-year mortgage but find the payments challenging, refinancing to a 30-year loan can lower your payments by as much as several hundred dollars each month. Conversely, if you have a 30-year mortgage, a 15-year term can help you build equity much faster.

Does refinancing hurt credit? ›

Refinancing will hurt your credit score a bit initially, but might actually help in the long run. Refinancing can significantly lower your debt amount and/or your monthly payment, and lenders like to see both of those. Your score will typically dip a few points, but it can bounce back within a few months.

Is 2024 a good year to refinance a mortgage? ›

Overall, refinancing could be a viable option for some homeowners in 2024, but the reality is that many existing homeowners have lower-than-average rates already. And if you're buying a home now with the expectation that you can refinance next year, that can be risky, as rates don't always follow predictions.

How much equity do you need to refinance? ›

Conventional refinance: For conventional refinances (including cash-out refinances), you'll usually need at least 20 percent equity in your home (or an LTV ratio of no more than 80 percent).

What is not a good reason to refinance? ›

Key Takeaways

Don't refinance if you have a long break-even period—the number of months to reach the point when you start saving. Refinancing to lower your monthly payment is great unless you're spending more money in the long-run.

What will mortgage rates be in 2024? ›

NAR: Rates Will Decline to 6.5% The National Association of Realtors expects mortgage rates will average 6.8% in the first quarter of 2024, rising to 7.1% in the second quarter, according to its latest Quarterly U.S. Economic Forecast.

Can you borrow more money when refinancing? ›

A cash-out refinance is when you replace your current mortgage with a larger loan and receive the difference in cash. Two important things to remember: The amount you can borrow is based on the amount of equity you have in your home. You typically can't borrow all of your home's equity.

What happens if I pay an extra $200 a month on my mortgage? ›

If you pay $200 extra a month towards principal, you can cut your loan term by more than 8 years and reduce the interest paid by more than $44,000. Another way to pay down your mortgage in less time is to make half-monthly payments every 2 weeks, instead of 1 full monthly payment.

Do you lose equity when you refinance? ›

Refinancing your mortgage does not have to negatively impact your home equity. Just the opposite, in fact: The goal of a refi generally is to get a new loan with lower interest rates, making repayments easier and allowing you to build equity faster.

Do you need a down payment to refinance? ›

You don't need a down payment to refinance, but you'll likely have to come up with cash for closing costs. Some lenders let you roll closing costs into the mortgage to avoid upfront expenses. You can also try negotiating with the lender to waive them.

What should you not do when refinancing? ›

Refinancing too often or leveraging too much home equity

Avoid making the mistake of refinancing excessively to land a low interest rate. The charges to refinance repeatedly could add up over time, negating the benefits. Be wary of also leveraging home equity too often.

How much does refinancing cost? ›

Refinance closing costs commonly run between 2% and 6% of the loan principal. For example, if you're refinancing a $225,000 mortgage balance, you can expect to pay between $4,500 and $13,500. Like purchase loans, mortgage refinancing carries standard fees, such as origination fees and multiple third-party charges.

Can you sell your house after you refinance? ›

You can sell your house right after refinancing — unless you have an owner-occupancy clause in your new mortgage contract. An owner-occupancy clause can require you to live in your house for 6-12 months before you sell it or rent it out.

Can you refinance twice within a year? ›

Or you may want a cash-out refinance, borrowing against the built-up value of your home to pay for remodeling or other things. And the fact is, you can refinance as often as you want, but some lenders look for a “seasoning” period between home loans, or a certain amount of time between appraisals.

How often are you allowed to refinance? ›

Legally speaking, there's no limit to how many times you can refinance your mortgage, so you can refinance as often as it makes financial sense for you. Depending on your lender and the type of loan, though, you might encounter a waiting period — also called a seasoning requirement.

When can I back out of a refinance? ›

If you are buying a home with a mortgage, you do not have a right to cancel the loan once the closing documents are signed. If you are refinancing a mortgage, you have until midnight of the third business day after the transaction to rescind (cancel) the mortgage contract.

Can I refinance immediately after closing? ›

You can usually do a no-cash-out refinance of a conventional mortgage immediately after closing on the original home loan. But some lenders set waiting periods, around six months to two years, before you're able to refinance with the same company. (Get around this by shopping with other lenders.)


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